• $280M lost monthly to front-running attacks on DEXs
• $12B in privacy coin market cap lacks DeFi integration
• Zero truly private DEXs with easy access to global liquidity

┌─────────────────────────────────────────────────────────────┐
│ Layer 5: Liquidity Interface                                │
│ - Public DEX aggregators                                    │
│ - Cross-chain bridges                                       │
│ - Modular design for privacy-native assets                  │
└─────────────────────────────────────────────────────────────┘
┌─────────────────────────────────────────────────────────────┐
│ Layer 4: Verification & Settlement                          │
│ - ZK proof of correct execution                             │
│ - On-chain verification                                     │
│ - Cryptographic guarantees                                  │
└─────────────────────────────────────────────────────────────┘
┌─────────────────────────────────────────────────────────────┐
│ Layer 3: Confidential Execution Environment (FHE Engine)    │
│ - Encrypted mempool                                         │
│ - Computation on encrypted data                             │
│ - Order matching & slippage calculation                     │
└─────────────────────────────────────────────────────────────┘
┌─────────────────────────────────────────────────────────────┐
│ Layer 2: Shielded Pool                                      │
│ - Incremental Merkle trees                                  │
│ - Zero-knowledge membership proofs                          │
│ - Nullifier system for double-spend prevention              │
└─────────────────────────────────────────────────────────────┘
┌─────────────────────────────────────────────────────────────┐
│ Layer 1: Vault Contract                                     │
│ - Trustless escrow for public assets                        │
│ - ETH, USDC, WBTC and more                                  │
│ - Release on valid ZK proof verification                    │
└─────────────────────────────────────────────────────────────┘

Siphon Protocol should integrate multiple compliance mechanisms to address regulatory requirements while maintaining core privacy principles:

• On-Chain Risk Oracle Integration: Funds entering the Siphon Vault must pass validation through established risk oracles (e.g., Chainalysis, TRM, or in-protocol scoring systems)
• Source Verification: Addresses are screened against known restricted or sanctioned lists before admission

• Privacy-Preserving Verification: Users can prove they meet KYC/AML requirements without revealing identity
• Compliant Service Provider Integration: Works with compliance providers to generate non-revealing proofs
• Address Sanctioning: Demonstrates funds are not from restricted address lists, cryptographically

• Per-Batch Proofs: Each execution batch emits a zero-knowledge event proving:
  • Encrypted trades were executed correctly
  • State updates followed protocol rules
  • Fees were computed and distributed correctly
  • All without revealing underlying sensitive data
• Cryptographic Guarantees: Mathematical proofs ensure system integrity
• Audit Trail: Maintains verifiable record of protocol correctness while preserving user privacy

Note: These compliance mechanisms are part of the architectural design and serve to demonstrate how privacy and regulatory compliance can coexist. Real-world implementation would require integration with licensed compliance service providers and legal frameworks.

siphon/
│
├── 📂 docs/                  # Documentation
├── 📂 packages/                 # Reusable cryptographic and utility packages
│   ├──  fhe-lib/                 # FHE matchine engine and python orchestrator
│   ├──  circuits/                # ZK-SNARK circuits for private proofs
│   └──  contracts/               # Solidity smart contracts for on-chain logic
│
├── 📂 public/                # Static assets

├── 📂 src/                   # Application source code
│   ├── 📂 app/              # Next.js 14 App Router pages and API routes
│   ├── 📂 components/       # Reusable React components
│   │   ├── ui/
│   │   ├── trading/
│   │   └── wallet/
│   │
│   ├── 📂 lib/              # Core FHE and ZK proof implementations
│   │   ├── fhe/
│   │   ├── zk/
│   │   └── blockchain/
│   │
│   ├── 📂 hooks/            # React hooks
│   ├── 📂 utils/            # Utility functions
│   └── 📂 types/            # TypeScript types
│
├── 📄 README.md

• Node.js 18+
• npm or yarn
• Git

# Clone the repository
git clone https://github.com/undefinedlab/siphon_eth.git
cd siphon_eth/siphon

# Install dependencies
npm install

# Run development server
npm run dev

🌐 Open http://localhost:3000 to see the application.

We welcome contributions! Here's how you can help:

1. Fork the repository
2. Create a feature branch (git checkout -b feature/amazing-feature)
3. Commit your changes (git commit -m 'Add amazing feature')
4. Push to the branch (git push origin feature/amazing-feature)
5. Open a Pull Request

• Follow the existing code style
• Add tests for new features
• Update documentation as needed
• Ensure all tests pass

This project is licensed under the MIT License - see the LICENSE file for details.

This project is a proof of concept and represents an exploration of potential directions for privacy-preserving DeFi protocols. It is NOT intended for production use, real-world financial transactions, or any non-academic purposes.

THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY.

• Academic & Research Only: This code is intended solely for academic study, research, and educational purposes
• NOT FOR PRODUCTION: Do not deploy this code in any production environment
• NOT FOR FINANCIAL USE: Do not use for any actual financial transactions or trading
• EXPERIMENTAL: This is experimental software with no security guarantees
• Zero Responsibility: Authors accept zero responsibility for any use, misuse, or consequences